Dnevnik – an isolated case or a paradigm of our media scene

As it seems, the first-instance verdict by the Commercial Court in Novi Sad – according to which the right to the trademark and the logo of the Dnevnik newspaper belongs exclusively to the Dnevnik Holding company and not to the Dnevnik Vojvodina Press company that publishes the newspaper – will not have any or at least not a significant effect on the long-lasting crisis that has affected the newspaper. Still, it may mark the beginning of the solution to various inconsistencies, speculations, contradictory information and mutual accusations between the founders of the newspaper that have been witnessed by the public in Novi Sad and Vojvodina during the last few years. However, it is certain that the verdict has once again proved that the model of privatization of Dnevnik – which was mostly based on political and social deals instead of modernization and advancement of business operations – was a complete failure.

In September 2003, after numerous political and labor troubles, the Assembly of Vojvodina gave its support to the contract on strategic partnership between the German media company VAC and the daily newspaper Dnevnik, which was founded by the province's parliament. At the time, the members of the Assembly supported the proposed contract between VAC and Dnevnik Holding according to which a new joint company, Dnevnik Vojvodina Press, was to be founded and managed by the German company, based in Essen, that would own 55 percent of its capital, and Dnevnik Holding (whose founder was the Province of Vojvodina) that would own the remaining 45 percent. From today's perspective, the motive behind the German corporation's decision to take over the majority ownership in Dnevnik seems a bit peculiar, taking into account the fact that nothing has changed with regard to business operations of the newspaper or modernization of its editorial policy, which, as it seems, were of no particular importance to anyone (contractual obligations with regard to a new building for the editorial office or a new printing press have not been fulfilled). Soon after these events it became evident that there were some problems between the founders, although the information came from "unofficial sources". Around two years ago, public accusations were made, mostly by the Holding, which accused VAC of failure to fulfill contractual obligations. Lawsuits followed. From today's point of view, it is not entirely clear why it took so long to begin efforts to solve the dispute which has evidently existed for a long time.

Things became even more complicated after VAC decided to leave Serbia because, in their words, the company had received a message from the Serbian authorities that its presence in the country was undesirable. VAC claimed that they were not leaving Serbia because of financial reasons, since the corporation had invested around 150 million euros in Serbia and dutifully paid all taxes and other obligations, but because they had not received any legally-stipulated assistance from the state.

In any case, VAC tried to solve the obviously complicated situation in Dnevnik Vojvodina Press (DVP) and unsolved disputes with the Holding by offering the company's employees 55 percent of founding rights, owned by VAC. The offer was not accepted by the other founder because it was dependent on writing off a part of the DVP's debt towards the Holding. On the one hand, certain participants in the media scene supported the transfer of ownership to the journalists, but some of the observers were of the opinion that the offer and potential benefits to employees of Dnevnik should be thoroughly analyzed.

Today, if the verdict passed by the Commercial Court in Novi Sad becomes effective, it would have the following consequences: Dnevnik Vojvodina Press company would lose the right to publish the newspaper with this title and logo. The company may launch a new newspaper, but since it finds itself in a difficult financial situation characterized by unclear ownership relations, it is almost certain that this will not happen. Dnevnik Holding would acquire the right to publish the newspaper again, independently from DVP, but it is now unclear how this would be realized, especially taking into account the fact that the company is currently being restructured and that parts of the Holding are on strike because of unpaid salaries.

Also, there is the very important issue of employees. If the verdict becomes effective, the intention of VAC to give the founding rights to employees becomes meaningless, because in such case they would inherit only debt. It remains to be seen whether the Holding would take over the editorial office. The Holding has said that they intend to continue publishing Dnevnik and that they will take over the current editorial office, at least in a large part, after the verdict comes into effect. They believe that the Holding will soon recover due to the social program that would entail reduction in the number of employees. At the same time, the company would change its business form and achieve complete integration. For these changes to be achieved, it is necessary to have an approval from the Ministry of Economy and Regional Development of Serbia and the Government of the Autonomous Province of Vojvodina.

The company also expects support from the Province, including five million dinars to be allocated each month as an assistance to the newspaper. At the moment, 2.7 million dinars is paid to DVP, while the rest of the sum is paid to the Holding to aid in covering the cost of printing. However, at the moment, Dnevnik is being printed by the Forum company because of the employees' strike in Holding. Even if these problems are solved, it remains to be seen how the Holding would survive in the market despite all its problems and obsolete technology – with or without the Dnevnik newspaper. It is also unclear whether the Province of Vojvodina, in its capacity as the founder of the Holding, has any specific plans about the company's future – will the company be privatized and will there be any parties interested in such privatization?

If the verdict becomes effective, it will mark an end to the privatization of Dnevnik and the situation will practically revert to the beginning, the same as it was in 2003, with the only difference being that precious time has been wasted and an opportunity missed to modernize the newspaper and make it competitive in the market. The situation in the editorial office of Dnevnik is also alarming since the atmosphere is neither inspirational nor constructive, while a large part of journalists have expressed their desire to leave the newspaper as soon as possible.

As it seems, the provincial government is only trying to solve the immediate problems, while there is no indication that it has any strategy to assist the newspaper with a long tradition and ensure its survival in the market. Is this a prelude to closure of Dnevnik? Such an outcome would undoubtedly mean a heavy blow not only to Vojvodina journalism, but the province as a whole.

Talking about strategies, this case should also be interpreted in the context of the long process of preparation of the media strategy of Serbia which is supposed to lead to the government's withdrawal from the media market, at least in accordance with the Draft Media Strategy that was recently publicly discussed. In this sense, the case of Dnevnik is a completely retrograde process since an effective verdict would make the Province of Vojvodina the sole owner of the newspaper via the Holding, which was founded by the Province.

The Draft Strategy envisions that the media would be financed only through project-based financing, which would certainly make impossible the assistance now provided by the Province of Vojvodina to the newspaper, which is needed to ensure its survival. It seems that no one is considering the effects the adoption of the Draft Strategy would have on the future of the newspaper! Perhaps it is the other way around: perhaps the case of Dnevnik would serve to influence the Media Strategy in a way that would allow the state to found and own newspapers?

In the end, it should be noted that the case of Dnevnik has proved that years-long delay in solving of crucial problems in the media scene only makes them bigger and more complex. At the same time, it is evident that political interference with the media brings only problems, not solutions. Perhaps Dnevnik will soon serve as a paradigm of our media scene, not an exception, until we finally realize that it is necessary to "reset" the media system and create a healthy foundation.

Nedim Sejdinovic

About the authors

MC Newsletter, July 29, 2011